Help to Buy is a great government initiative that helps hundreds of people buy their first home each year. But as house prices seem to be almost unreachable, and saving a deposit a mammoth task, many people are buying their first house as a couple.
So can you and your partner both use a Help to Buy ISA in order to co-buy the same property? Or if you already own a property, and are selling it to buy one with your partner who has not previously owned property, can they use a Help to Buy ISA on that property?
We take a look…
What is a Help to Buy ISA?
A Help to Buy ISA is a government initiative set up on the 1st December 2015.
The scheme adds a 25% bonus to your savings. So for every £200 you save, the government will give you a £50 bonus. The maximum government bonus you can get is £3,000 when you save £12,000 into your Help to Buy account. So between yourself and your partner, you could receive up to £6,000 towards your first home.
When you open the account, you are able to deposit up to £1,200 into it in the first month, and for every month after that, you can pay one deposit into it of up to £200.
The minimum amount you can save into your Help to Buy ISA in order to gain from the bonus scheme is £1,600 which will give you the minimum government reward of £400.
Like any other ISA, the savings are tax free. The Help to Buy ISA is available from a range of different banks and building societies which all have varying rates of interest.
Help to Buy ISAs are available until 30th November 2019 and must be claimed by 1st December 2030.
Can both my partner and I use a Help to Buy to purchase the same property?
Yes! The help to buy government website states the following: ‘The accounts are available to each first time buyer, not each household. This means that if you are planning to buy with your partner, for example, you could receive a government bonus of up to £6,000 towards your first home.’
So this is great news for couples looking to purchase a home together, as they are able to get a maximum of £6,000 between them plus the £24,000 they’ll have saved, to put towards their deposit on their first home.
That means whether you are both buying your first house together, or whether you already own a home and are selling that to buy a house with your partner. As long as the house is your partner’s first home, they will be able to use their Help to Buy ISA when purchasing the property. Vice versa, if they have previously owned a property and this is your first home.
Tammy Jones, residential conveyancer and Partner at Birchall Blackburn Law says: “The Help to Buy ISA has enabled more people access to the housing ladder. We have seen more first time buyers through the doors thanks to the Help to Buy scheme.”
“It is a great incentive to save and gives first time buyers an extra boost to their savings.”
Dominik Lipnicki, of mortgage brokers Your Mortgage Decisions, said: “Remember, the most that can be saved in any given month is £200, as well as an opening lump sum deposit of £1,200. In reality that means that it takes a long time to get anywhere near the £3,000 maximum bonus.”
“New savers must open a Help to Buy Isa account by 30 November 2019, as no new applications will be accepted after that date. You can however continue to save for another 10 years after that date.”
For more information, please see our conveyancing pages.
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For the Government Help to Buy ISA and Calculator, click here.